Benjamin Cowen argues that there is a risk that a more policy-compliant Fed could erode confidence even if markets get lower interest rates.
Popular analyst Benjamin Cowen said in an
His warning goes beyond cryptocurrencies: He says cheering Jerome Powell’s exit from the Fed could create the same kind of credibility problem in traditional markets.
The celebration that became a turning point
Quinn suit Quite frankly: Gensler’s departure was widely welcomed, but it essentially removed the threat of consequences for bad actors. What followed, in his view, was a period in which influencers and politicians launched cryptocurrencies, attracted followers, and paid no price for it.
Capital that could have flowed into projects of actual benefit was sucked into what he called “useless assets,” shrinking liquidity across the board. Bitcoin rose slightly after Gensler left, then fell, with many people speculating that the rally never materialized in any meaningful way.
According to Cowen, a similar pattern is forming around Fed Chairman Jerome Powell, after what is expected to be his final meeting as chair on Wednesday, as… detained The benchmark interest rate was unchanged for the third time in a row, leaving interest rates at 3.50%-3.75%, with four officials dissenting.
Trump appointee Kevin Warsh, indeed to survey By the Senate Banking Committee, he is set to succeed Powell, and as with Gensler, large parts of the market are treating the former’s exit as a bullish development, and they expect the new president to push interest rate cuts more aggressively.
Quinn doesn’t share this confidence:
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“If the Fed becomes just another cabinet of the executive branch, it could create a lack of confidence in the institution itself,” he wrote.
His read is that markets are better off with a Fed that feels independent than with one that feels compliant, even if compliance achieves the interest rate cuts that traders want in the near term.
What happens after the cheering fades away?
Turkish cryptocurrency commentator Cihan0x.ETH expanded Coin’s logic further, Pointing Interest rate cuts are no longer expected anytime soon, with the timeline shifting from a 2026 forecast to 2027, driven primarily by energy-side inflation rather than demand.
The war in Iran has kept global energy prices high, which is evident in US inflation data: the same Fed statement cited “the recent increase in global energy prices” as a contributing factor. This kind of inflation gives the Fed less room to act, not more, regardless of who heads it.
The other dimension of Wednesday’s news is structural. Powell Announce He plans to remain on the Fed’s board after his presidency ends next month, citing what he described as “unprecedented” legal pressure from the Trump administration as a reason he does not yet feel it is appropriate to leave.
His decision deprives Trump of the opportunity to take an additional seat on the board, and could create what some analysts call a “popes” dynamic, with a chair and a former president on the same seven-member board.
